Tennyson: Rankings to highlight road-funding dilemma

A new system for ranking transportation projects likely will force a “readjusting [of] our expectations” about how many of them North Carolina can realistically afford, a former Durham mayor says.

“The scale of what we’re talking about here is going to become apparent as we go through [this] process,” state Department of Transportation Chief Deputy Secretary Nick Tennyson told participants in a Wednesday conference organized by the N.C. Chamber.

Tennyson – Durham’s mayor from 1997 to 2001 – was referring to the new ranking system established by the funding-reform bill that state legislators and Gov. Pat McCrory enacted last year.

DOT is now sizing up about 1,300 transportation projects that already were on the books, plus another 500 or so that communities from around the state sent in for evaluation.

The review should boost some projects that languished under the state’s previous funding system, Tennyson said.

But it also will illustrate the likely funding shortfall, an issue hardly unique to North Carolina, he said.

“I am absolutely certain there is not sufficient will in America to transfer enough money from the private sector to the public sector to get these things done,” Tennyson said. “Reduced to that level, it gets awfully unpopular.”

Tata said DOT is almost ready to release a “snapshot” of its first-take, in-house evaluation of the projects that already had been on its books, not accounting yet for the input that also will go into the final rankings from local government and the agency’s division engineers.

Work on refining the rankings will continue through the summer on into the fall, he said.

McCrory, meanwhile, indicated he wants the rankings in hand before state leaders begin talking about how to pay for transportation projects going forward.

Tata, Tennyson and other officials present made it clear the current system, heavily reliant on gasoline taxes and federal subsidies, is creaky.

Gas-tax revenues are likely to erode as cars and trucks become more fuel efficient. And the federal government’s short- and long-term political and budget troubles are serious enough that officials think the state will have to cut back on its use of them.

The immediate worry is that an impasse over a rewrite of federal transportation legislation could produce a cut-off of subsidies later this year, McCrory and the DOT officials said.

They urged the assembled business leaders to help lobby members of the state’s Congressional delegation.

“The business community has got to step up and get Congress un-paralyzed up there,” McCrory said. “This is an October deadline coming very quickly, and it could cost us $1 billion here in North Carolina.”

But the long-term funding issue was clearly on the minds of N.C. Chamber leaders, as they’d invited former Virginia Secretary of Transportation Secretary Sean Connaughton to brief them on how that state had dealt with it.

Virginia officials are but a year removed from passing a top-to-bottom revamp of its funding system for transportation projects.

Among other things, they replaced the state’s retail tax on fuel with a lower wholesale tax, and bolstered transportation funding with increases in sales taxes statewide with additional surcharges in the Norfolk area and northern Virginia.

The move was highly controversial, drawing opposition from Tea Party activists even though the state’s Republican then-governor, Bob McDonnell, supported it.

Connaughton said the Virginia administration prepared the political ground by first looking for in-house efficiencies and showing openness to other fundraising ideas. But when those proved insufficient, it launched a full-court press for the tax changes.

Its polling suggested the idea had public support, Virginians seeing retail-level gas taxes as more regressive than sales taxes, he said.

Among residents, the attitude seemed to be that while “‘I have to drive to work, I have to take my kids to school, I have to use my vehicle,’” sales taxes target discretionary expenses, Connaughton said, adding that Virginia doesn’t tax food purchases.